Stage 3 Tax Cut from July 2024
The government has recently made some adjustments to the tax cuts set to kick in from July 1 this year. Here's a simple breakdown of what's changing and how you might take advantage of these changes to boost your savings.
What's New?
The planned 'Stage 3 tax cuts' have been tweaked. While the tax-free threshold remains unchanged at $18,200, here are the key changes:
The 19% tax rate will drop to 16%.
The 37% tax bracket is back, now applying to incomes between $120,000 and $135,000.
The 45% tax rate will now start at $190,000, down from $200,000.
How Does This Affect You?
You'll see these changes reflected in the tax withheld from your pay or superannuation income streams, meaning more money in your pocket throughout the year. There's no need for any action on your part regarding your tax return to benefit from these savings.
Maximising Your Savings:
In light of these changes and the current economic climate, every bit of savings counts. Here are a few strategies to consider:
Boost Your Super: Small contributions to your super can make a big difference over time. You might also explore tax-advantaged contributions like personal deductible contributions or contributing for a low-income spouse.
Consider Contribution Timing: If you're planning extra super contributions, think about the timing to maximise tax benefits, especially with the new tax rates.
Asset Sales: If you're thinking about selling assets, the timing could significantly affect your capital gains tax, especially with the upcoming tax rate changes.
Prepaid Expenses: Some tax-deductible expenses, if prepaid, could offer more tax savings depending on your situation and the new tax rates.
Next Steps:
To fully understand how these changes can benefit you and explore strategies tailored to your situation, we encourage you to get in touch. We're here to help you navigate these updates and make the most of your financial planning.
Please note: This information is general in nature and does not take into account your personal circumstances. For advice specific to your situation, please consult with us directly.